Registering a company and getting permission to run it are two different jobs. You can have the LLC, the name and the tax ID and still be missing a license your state or city expects you to hold before you take your first customer.
The SBA’s guidance is short and worth reading in full. Its opening point: “Most small businesses need a combination of licenses and permits from both federal and state agencies.” The rest of this guide is a way to work through that without guessing.
Why there is no single list
There isn’t one checklist, because the answer turns on three things the SBA names: what your business does, where it is located, and the rules that apply there. Two founders with identical LLCs can have completely different obligations. A freelance designer working from a spare room and a woman opening a restaurant are barely playing the same game.
Federal licenses: narrower than you think
The SBA says federal licenses apply to activities regulated by a federal agency. Its examples include:
- Alcohol: manufacture, wholesale, import and retail sale (the Alcohol and Tobacco Tax and Trade Bureau, plus local alcohol beverage control boards)
- Firearms, ammunition and explosives: the ATF
- Broadcasting: radio, television and other broadcasts (the FCC)
- Aircraft: operating, air transport and maintenance (the FAA)
- Commercial fishing: NOAA Fisheries
- Interstate transport of animals, animal products and plants: USDA
- Wildlife-related activity: U.S. Fish and Wildlife Service
If your business isn’t in a regulated lane like these, you probably don’t need a federal license at all. If it is, that’s the first thing to settle, because it’s the least flexible.
State and local: where most founders land
The SBA says states “tend to regulate a broader range of activities than the federal government,” and that your county or city may require licenses too. The activities it lists as commonly regulated at these levels include auctions, construction, dry cleaning, farming, plumbing, restaurants, retail and vending machines.
The SBA also notes that “industry requirements often vary by state,” so a rule that applies to your friend’s business in one state may not exist in yours.
How to work out what you need
- Name your activities precisely. “Selling candles online” and “selling food at a farmers’ market” are regulated differently. Write down what you make, where you sell it and whether customers come to you.
- Start with the state. The SBA’s advice is to check your Secretary of State’s website for state requirements, and it links to a state registration lookup tool.
- Then the county and city. Local government websites cover local licenses and zoning. This is the layer people skip.
- Check for a federal license against the agency list above. Most founders can rule this out in a minute.
- Write it all down with the issuing office, the fee, and the date each one expires.
Working from home
A home base doesn’t exempt you. The SBA says home-based businesses may face fewer zoning restrictions, but “zoning ordinances can still apply even to home-based businesses.” Zoning is generally handled locally, so ask your city or county before you put up a sign, take client visits or store inventory at home.
Renewals
Some licenses and permits expire after a set period of time, and the SBA’s advice is to keep close track of renewal dates, noting that renewing is often easier than reapplying. A calendar reminder set a month ahead costs nothing.
Where this fits in setup
Licenses sit alongside the other foundations. Your EIN and any DBA registration come first for most founders, and a license may be one of the documents a bank asks for when you open a business account. Once you’re operating, business insurance is the next layer, and if you want government work, WOSB certification is separate from any of the licenses above.
Frequently asked questions
Do I need a federal business license?
Only if your activity is regulated by a federal agency. The SBA lists examples including alcohol production and sales, firearms, commercial fishing, broadcasting, aircraft operation, and interstate transport of animals and plants. Most small businesses are more likely to need state and local licenses.
Where do I find which state and local licenses I need?
The SBA says industry requirements often vary by state. It points you to your Secretary of State’s website for state requirements and to your local government’s website for county and city rules.
Do I need permits for a home-based business?
Possibly. The SBA says home-based businesses may face fewer zoning restrictions, but zoning ordinances can still apply to them. Zoning is generally handled at the local level, so check with your city or county.
Do licenses and permits expire?
Some do. The SBA says some licenses and permits expire after a set period and advises keeping close track of renewal dates, since renewing is often easier than reapplying.
Source: SBA, “Apply for licenses and permits.” Requirements differ by state, county and city, so confirm with your own offices before you open. This is general information, not legal advice.